The National Taxation Bureau of the Northern Area（NTBNA）, M.O.F., stated that if a profit-seeking enterprise organized as a company seeks to apply for offsetting between profits and losses regulations under Article 39 of the Income Tax Act, it must keep a complete set of account books and evidential documents, use the Blue Returns, or the account books audited and attested by a certified public accountant. Additionally, it should file annual income tax return within the prescribed period. In a recent announcement, the Ministry of Finance issued an interpretive ruling relaxing the requirement that profit-seeking enterprises must file annual income tax returns within the prescribed period to apply for offsetting between profits and losses. If a profit-seeking enterprise files its income tax return late, it must pay the amount of tax due independently. However, if the taxpayer does not meet the requirements under Paragraph 1, Article 20 of the Tax Collection Act, which mandates the imposition of a delinquency charge, the case may be considered minor depending on the circumstances. In such cases, the taxpayer may still be eligible to apply for the offsetting of profits and losses.
The Bureau explained with an example: Company A has maintained a complete set of account books and supporting documents for 2023, reporting an annual income of NT$10 million, audited and certified by a certified public accountant. After deducting NT$5 million in losses from the previous 10 years, the taxable income is NT$5 million, and the tax payable is NT$1 million. Company A filed its settlement declaration on May 31, 2024, but the tax payable was not settled until June 3, 2024. According to Paragraph 1, Article 20 of the Tax Collection Act, a delinquency charge equal to 1% of the amount of said tax shall be charged for every 3 days of delay. Although Company A settled the tax payable late, it does not meet the criteria for delinquency charges. According to the new interpretive ruling issued by the Ministry of Finance, the offset of NT$5 million in profits and losses is still applicable.
The Bureau would like to remind profit-seeking enterprises that if they settle the tax payable more than 3 days after the prescribed deadline, they will not meet the 'timely filing' requirement and will not be eligible to apply for the offsetting of profits and losses. If you have any questions, please visit the NTBNA website （https://www.ntbna.gov.tw） to learn about the relevant laws, or call the toll-free service number 0800-000321 for detailed consultation services.
〔Contact person: Ms. Liu, Head, Profit-seeking Enterprise Income Tax Division； Tel:（03）3396789 ext. 1340〕